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Key Toronto Homebuying Season Turns in Buyers’ Favor This Year

Ari Altstedter
·2 min read

(Bloomberg) -- Toronto’s traditional spring housing market kicked off in favor of buyers as prices fell and new listings rose from the same time last year.

Most Read from Bloomberg

The number of properties being put up for sale surged 47% from a year ago, according to a report Friday from the Toronto Regional Real Estate Board. The benchmark price for a home in Canada’s largest city fell 1% to C$1.128 million ($826,000) last month from April 2023, not seasonally adjusted.

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The return of warmer weather typically heralds the busiest season for housing markets across Canada. But April’s rise in listings is a stark contrast to last year, when a dearth of homes for sale fueled a short-term price surge.

This year, the Bank of Canada’s determination to keep borrowing costs high until it’s clear that inflation has come under control is keeping homebuyers subdued for longer: 7,114 homes were sold in the Toronto region in April, down 5% compared with the same period a year earlier.

“While sales are expected to pick up, many would-be home buyers are likely waiting for the Bank of Canada to actually begin cutting its policy rate before purchasing a home,” Jennifer Pearce, president of the Toronto real estate board, said in a statement.

While buyers are facing a slightly less expensive market this spring compared with a year ago, prices are a little higher than they were in January. The benchmark price of a Toronto home was up 0.4% in April from March, according to seasonally adjusted data — the third straight monthly rise.

Read More: Faulty Inflation Forecasts Hold Bank of Canada Back on Rate Cuts

Expectations for interest-rate cuts have started to shift. At the start of the year, traders were expecting the Bank of Canada to lower its policy rate all the way to 3.75% by the end of 2024. Now they’re betting it will drop only to 4.5% by then.

The central bank’s overnight rate is currently 5%. Commercial bank prime lending rates are set 2.2 percentage points above that — so 7.2% currently.

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